The Ministry of Finance Decree No. 24 of 2023 (the "Decree") was published in the Official Gazette on 11 January 2023, and entered into force as of 12 January 2023. The Decree amends, adds to and annuls several provisions of the Executive Regulations of the VAT Law No. 67 of 2016, promulgated by Decree No. 66 of 2017 (the "Executive Regulation").

The main issues addressed by the Decree are the following:

  • VAT exemptions on goods and services imported by projects in Free Zones and Special Economic Zones for the purpose of carrying out their licensed activities, if the imported goods are not for local use or consumption, and with the exception of imported transportation vehicles.
  • A one-year grace period for VAT collection related to machinery and equipment imported from foreign countries or purchased from industrial local market and local production units for the purpose of industrial production.
  • A potential total exemption of VAT on such machinery and equipment, if the importing project refrains from legal disposition of said equipment for a period of five years.
  • VAT exemptions of services and goods exported to foreign countries by projects in Free Zones and Special Economic Zones.
  • Simplified registration procedures for non-resident suppliers and unregistered persons through the Tax Authority's online portal.
  • Simplified procedures for VAT application to e-commerce transactions.
  • Clear process for VAT return system on exported products.
  • Clear process for VAT refund to foreign visitors upon departing the country.

The controls and procedures provided in the Decree are expected to facilitate benefiting from the exemptions introduced by the latest amendments to the VAT Law, with the aim of encouraging investments, supporting industries, and stimulating production and growth.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.